Allowance: The Anti-Deprivation

After we became debt free and we had a 6 month emergency fund we backed off a little on the gas. I was starting to feel deprived and it was hard to stay motivated. After reading some other blogs I found many people had fun money. Money to do whatever you want with.

I suggested to my wife, Ms Blue Ribbon, that maybe we should take an allowance. Nothing much, just $15 each a month. She was good with that and almost immediately I started feeling better.

More questions than answers

Where things started getting interesting was when we tried to figure out what money covered what expenses.

It was clear that $15 wasn’t much and there were things that should be covered by this allowance and things that should be paid for by something else. Quickly we realized there were separate financial entities that were existing under one big umbrella.

And the groups are?

The family as a whole or what we called the “house”. The house was going to be paying for all the core items like the mortgage, insurance, food, utilities, etc. We also figured the house was going to cover retirement contributions so it should also be the one to add to the 529 plans.

My wife and I would use our money for fun stuff like video games, clothes, and any other things we would want for ourselves. While she was pregnant Ms Blue Ribbon tried to use her allowance to buy maternity clothes.

This is one thing we didn’t see eye-to-eye on.

I ended up winning arguing that is was a “house” budget item because it was both of our faults and had to do with one of the kids. (I can hear some of you in the audience say it’s mostly Mr. BoaS’s fault.)

The kid’s money would be used for toys and clothes, etc.

No method is perfect. We haven’t determined how school supplies work into this. How are the kids going to earn their money when they get to the age where that is applicable? Will we have to modify the method when it comes to Save/Spend/Share? (<- NOT an affiliate link)

Maybe that’s where you come in. Should the kids cover items like that? What exercises did we not cover? Do you take an allowance?

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15 thoughts on “Allowance: The Anti-Deprivation”

We give ourselves about $10/week as ‘fun money’, and it usually ends up covering a lunch out or something like that. The best thing Alyssa and I ever did was to open a joint checking account. We put all of our “house” expenses together and figured out how much out of each paycheck we each needed to fund the account. We use our joint account to buy groceries, pay the bill when we eat out, etc. and it has taken all of the ‘weirdness’ out of situations where we don’t know who will pay. We know so many couples who have been married years and still have completely separate finances and I can’t fathom living that way.

Great advice! I think most couples these days are trending towards splitting finances without combining everything. So many will be like you, with a shared checking, but potentially with other separate accounts.

I think this is a great concept and can help many people who are struggling with constrictive feelings from budgeting.

My wife and I had “fun money” for a long time but wound up stopping recently. We realized that, over the past year or so, we were “hording” the cash with the intention of using it for a night or two away from home. That being the case, we stopped the fun money and just moved that amount over into the vacation category.

I suggest most people keep the category though – especially when things are tight and you’re trying to scale back spending.

My kiddo isn’t old enough for an allowance yet so I don’t know what the right amount will be. Growing up I use to get $5 a week. I have no idea if that was considered a lot of money or not. But that’s what I got and I tried to save as much as possible. I wasn’t sure what I was going to spend it on but I knew I wanted the options when I got older 🙂

We don’t have any fun money… not sure why. We’re not very fun? I think hubby brought up “buffer money” when we were making our budget and I called him a coward LOL! So we never implemented one..hm.

One of my friends listed $20 every two weeks for each spouse and $10 for each kid for gum and toys (nothing school related.) Is fun money the norm? I think it’s surprising… It’s just not something I thought of doing. If I want something I’ll wait on it for 2 weeks and see if I still want it. Then I’ll get it, I don’t want to count dollars on it.

We certainly have a discretionary category in our budget. $30 a month towards anything we want, no question asked by the other spouse. This is like our ‘cheat meal’ of budgeting. Mine is usually spent on weekly Starbucks trips or beer that is not part of the grocery budget. Anything extra I usually slide into my taxable investment account for safe keeping.

As far as children’s allowance, having a 16 month old makes me shudder at the thought. I can’t imagine what inflation will do for kids allowances in the future! 😉

Mrs. Vigilante and I really like his own solution, and will probably implement something similar when our future child reaches the right age. But there are all kinds of valid theories on that page that differ dramatically!

We gave our kids an allowance (based on completion of chores) but that only lasted for a few months because we/they kept forgetting to collect. Fortunately, now Nanna has taken to sending them $5 a month. It often gets 100% invested in their bank account (they love compounding interest!) but every once in a while, they buy some candies with it.

I have a “school” category in my expenses. If we do a few entertainment things that go over that budget, I take it out of the school category. It’s always educational anyways.

My husband takes a $200 a month (!) allowance and I go away with my girlfriend for a long weekend (to Las Vegas or something) with some odds and ends thrown in. Probably about $3,000 a year total. I keep wanting to end it but I know that it’s really important to his personal happiness and he goes along with all my other “creative” ideas.